Victory Giant Technology Shares Fall 7% as H1 Margin Pressure Overshadows 33% Profit Jump

Victory Giant Technology (HuiZhou) Co., Ltd. shares dropped about 7% on Friday after the Chinese printed-circuit-board maker reported strong first-half 2026 results driven by AI demand but revealed a clear deterioration in gross margins. Revenue rose 28.8% year-on-year to RMB 11.63 billion while net profit climbed 33.3% to RMB 2.86 billion; however, overall gross margin slipped to 33.2% from 36.2% a year earlier, with PCB margins falling more sharply.

Victory Giant H1 Revenue Up 28.8% to RMB 11.63bn, Profit Jumps 33% but Margin Falls to 33.2% as Shares Drop 7%

• Revenue for the six months ended 30 June 2026 reached RMB 11.629 billion, up 28.77% from RMB 9.031 billion a year earlier.
• Net profit attributable to shareholders rose 33.30% to RMB 2.857 billion from RMB 2.143 billion. Diluted earnings per share increased 25.6% to RMB 3.14.
• Gross profit advanced 34.8% to roughly RMB 7.77 billion, yet the gross margin contracted 3 percentage points to 33.2%. PCB segment margins specifically declined to 28.6% from 33.1%.
• Operating cash flow surged 144.6% to RMB 2.911 billion. The company added more than 50 new customers in the period, over half of them high-end AI clients, and achieved large-scale mass production of multiple high-end products for AI computing, data centres, high-performance computing and optical modules.
• On the Hong Kong market (2476.HK) the stock fell approximately 7% to around HK$234–235, after closing the previous session near HK$253. The move came despite a modest gain in the Hang Seng Index. A-shares (300476.SZ) also weakened.

Margin Squeeze and Capacity Costs Trigger Profit-Taking After 20% Rally in AI PCB Name

Investors focused on the margin compression rather than the headline growth. The company attributed the gross-margin decline to higher labour costs, the ramp-up of new production capacity and elevated raw-material prices linked to Middle East supply-chain disruptions. After a roughly 20% rally in the preceding month, the results raised doubts about whether rapid capacity expansion would translate into sustained bottom-line improvement, prompting profit-taking in one of the market’s hottest AI-linked PCB names.

Victory Giant: Top-10 PCB Maker With US$2.6bn Hong Kong Listing

Victory Giant is a major Chinese manufacturer of high-precision printed circuit boards, ranked among the global top-10 suppliers. It specialises in high-density interconnect (HDI) and multilayer boards used in AI servers, data-centre equipment, high-performance computing, optical modules, smart terminals and automotive electronics. The company listed H-shares in Hong Kong in April 2026 after raising approximately US$2.6 billion in one of the year’s largest IPOs.

AI infrastructure build-out has been the primary growth engine: high-end products now form a rising share of the mix and the firm has secured mass-production wins with ASIC and hyperscale customers. Total assets jumped nearly 79% in the first half to RMB 63.0 billion, reflecting aggressive capacity investment. Employees number about 18,000. While top-line and profit growth remain robust, the margin trajectory has become the key near-term concern for a stock that still trades at a high valuation multiple.

Focus Turns to Q3 Results for Margin Recovery and Capacity Utilisation Signs

Investors will watch third-quarter numbers for signs that new capacity is absorbing and that margins stabilise or recover as utilisation rises. Management commentary on raw-material cost trends, labour inflation and the ramp of higher-margin AI and HDI products will be closely scrutinised. Any updates on additional major AI customer wins or further capacity plans could also move the shares. The next scheduled earnings report is expected in late October for the third quarter.